Museum complaints sent to Justice Department

The state of North Carolina can’t decide what it wants to do with complaints about the Museum of the Waxhaws. Days after the Secretary of State’s office closed its investigation, with no finding of wrongdoing, the complaints were forwarded to N.C. Attorney General Roy Cooper’s office.

“We’re limited by state statute as to what we have jurisdiction over,” Secretary of State spokesperson Liz Proctor said. The Secretary of State’s office can only regulate what’s known as direct contributions from citizens, Proctor said, it has no authority over state or federal grants.

“Our Consumer Protection Division has received this information from the Secretary of State’s office and we are currently reviewing it,” Justice Department spokesperson Noelle Talley said. She didn’t have a timeline on how long it would take to determine if the information warranted an investigation.

The report from the Secretary of State’s office said it found no wrongdoing with how the museum operated, based on the forms submitted each year to the Internal Revenue Service. The Secretary of State’s nonprofits division granted the foundation its charter and monitors its tax exempt status.

Since April, four complaints were filed with the Secretary of State’s office regarding the museum and its financial practices. Out of those four, only two actually progressed to written, official complaints. Out of those two, only one included any type of supporting ­documentation.

“Solicitation for charitable purposes in North Carolina requires annual renewal of an organization’s charitable solicitation license or exemption,” Nonprofit Division Director Heather Black wrote in the report. “(The) Andrew Jackson Historical Foundation currently holds a valid charitable license that is set to expire on Nov. 15, therefore, this organization has complied with requirements to legally solicit (donations).”

Both complaints dealt with where and how the museum’s contributions are spent. In 2007, the museum received $132,577 in grants, gifts and other donations. That dropped in 2008 to $84,206 and in 2009 to $62,070. In each of the years, the museum managed to generate a profit, except for the last fiscal year ending June 30, 2010, where they posted a $45,363 deficit, due in part to replacing the museum’s roof. Each complaint raised the question of how the museum can be in debt, when three out of four years it turned a profit.

Proctor also pointed out that North Carolina statute does not give the Secretary of State’s office any authority over how museums spend state, federal or local grant dollars.

Union County Weekly obtained copies of both written complaints and the investigation report. The first complaint, dated April 6, pointed out that the Andrew Jackson Historical Society, the parent group that operates the museum, had two significant grants provided to them in excess of $200,000, as well as several smaller grants. Yet in the six day investigation that followed, department officials said they couldn’t find any evidence the museum had received state funds.

“There is no evidence of the organization receiving state and federal grant monies,” the report states, adding that even if they had received state funds, the nonprofits division doesn’t have the authority to monitor those.

The problem is that a state grant was how the museum originally came to be. In 1988, the Andrew Jackson Historical Foundation received a $400,000 grant from North Carolina, which was used to hire a local architect to draw plans and a construction company to build the museum. Additional state grants came in Feb. 1994, July 1995, January 1996 and 1997. Those contributions totaled another $500,000.

Proctor said the investigators missed that information because it wasn’t listed in the museum’s 990 tax return for those years.

“The 990 forms didn’t specify any grant money,” Proctor said. “(The investigators) were just able to look over what we received from the nonprofit.”

The museum did receive a citation from the Secretary of State’s office, in the form of a written letter. The one issue the division had was that a piece of information had been left off tickets for their March fundraiser.

Each charity or nonprofit has to state on tickets or brochures that financial information about the organization itself and a copy of its license are available to the public by calling 1-888-830-4989.